Courtesy of Doug Short.
The Second Estimate for Q2 GDP came in at 1.0 percent, an unwelcome cut from the Advance Estimate of 1.3 percent reported last month. Here is the opening text from the Bureau of Economics Analysis news release:
Real gross domestic product — the output of goods and services produced by labor and property located in the United States — increased at an annual rate of 1.0 percent in the second quarter of 2011, (that is, from the first quarter to the second quarter), according to the “second” estimate released by the Bureau of Economic Analysis. In the first quarter, real GDP increased 0.4 percent.
The GDP estimates released today are based on more complete source data than were available for the “advance” estimate issued last month. In the advance estimate, the increase in real GDP was 1.3 percent (see “Revisions” on page 3).
The increase in real GDP in the second quarter primarily reflected positive contributions from nonresidential fixed investment, exports, personal consumption expenditures (PCE), and federal government spending that were partly offset by negative contributions from state and local government spending and private inventory investment. Imports, which are a subtraction in the calculation of GDP, increased.
The acceleration in real GDP in the second quarter primarily reflected a deceleration in imports, an upturn in federal government spending, and an acceleration in nonresidential fixed investment that were partly offset by decelerations in PCE and in exports and a downturn in private inventory investment. [Full Release]
The Briefing.com consensus was for 1.0, and Briefing.com’s own estimate was spot on at 1.0.
Here is a look at GDP since Q2 1947 together with the real (inflation-adjusted) S&P Composite. The start date is when the BEA began reporting GDP on a quarterly basis. Prior to 1947, GDP was reported annually. To be more precise, what the lower half of the chart shows is the percent change from the preceding period in Real (inflation-adjusted) Gross Domestic Product. I’ve also included recessions, which are determined by the National Bureau of Economic Research (NBER).
Here is a close-up of GDP alone with a line to illustrate the 3.3 average (arithmetic mean) for the quarterly series since the 1947. I’ve also plotted the 10-year moving average, which, at 1.6, is above the Q2 advance GDP number.
Here is the same chart with a linear regression that illustrates the gradual decline in GDP over this timeframe. The latest GDP number is about about half the approximate 2.1 of the regression at the same position on the horizontal axis.
And for a bit of political trivia in this post-election period, here is a look a GDP by party in control of the White House and Congress.
In summary, the Q2 GDP Second Estimate of 1.0 is less than a third of the long-term 3.3 GDP average, below the regression and below the 10-year moving average. The second quarter of 2011 shows that the U.S. is not experiencing a strong recovery in the aftermath of the Financial Crisis and Great Recession.
